PMA Firms: Optimistic But Challenged by Rising Lead Times

Written by Sandy Williams

Metalforming companies are optimistic about business conditions for the next three months, but are concerned about longer lead times for steel and other materials. In the April 2021 Business Conditions Report by the Precision Metalforming Association, 56% of participants expect improvement in economic activity in the next three months compared to 50% in March. Only 7% of companies expect a decline, down from 9% in March. Production, however, is challenged by raw materials lead times that have increased every month since September 2020. In April, 64% of respondents reported lead times were higher than the previous three-month period compared to just 16% who said so in September.

“Metalforming manufacturers continue to report improved business conditions, but also are experiencing growing challenges in finding steel and other raw materials needed to meet growing demand,” said PMA President David Klotz. “Our members report increased lead times for steel, aluminum, copper, brass and other metals. Steel prices are at or near record highs, making it difficult for U.S. manufacturers to compete. Some of our members report paying 40% more for steel than their overseas competitors. PMA continues to call on the Biden administration to terminate the Section 232 steel and aluminum tariffs, which no longer are needed and are one of the main causes for chaos in the market.” 

About 72% of respondents reported an increase in average daily shipping levels, up from 63% in March. Orders are expected to continue to trend upwards over the next three months.

Companies are keeping busy with only 1% of firms reporting a portion of their workforce on short time or layoff, the lowest level since May 2018 when the percentage was zero. About 74% of PMA respondents said they are currently expanding their workforce.

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